Legora CEO Max Junestrand: Building the legal AI operating system | Bessemer Venture Partners

0:03 Awesome, Max. I'm so fired up that we're getting to do this, man. I can't believe that it hasn't even been a year yet since >> Has it not? >> since we had our post-midnight conversation at the train station in New York City. I'm so grateful that >> We almost barely did not find a bar. >> We almost didn't. We tried like two different places. >> this would have never happened. You would have never come to Stockholm.

0:24 >> Thank thank goodness, but I knew That's when I knew that you were built different was 99 out of 100 founders were going to say, "Yeah, let's just cancel and reschedule cuz my flight got canceled." But you said, "I'm getting on a train. I will see you at the train station at midnight." And I'm like, "This is our guy." >> And you came. >> >> It was great. Had a good time. >> And you guys have accomplished such extraordinary things in the meantime.

0:45 >> >> I can't I can't get over it. You're very famous now in these AI circles. And And so I figured today we would spend a lot of time talking mostly about things that actually might help a bunch of listeners, founders in the AI world cuz what you >> have accomplished now >> in this very short window of time is truly exceptional. Like crossing 100 million in the shortest time for any B2B software company in history, faster than Anthropic and OpenAI and Cursor and the like, is extraordinary. And particularly the the part of it that's exceptional to me is that it's with enterprise. Like some of these other high-flying AI companies that have like a heavy prosumer consumer bottoms-up >> Yeah.

1:25 >> adoption, but you've managed to do that kind of meteoric growth selling to an enterprise buyer. >> With a customer who likes to mark up the contract for sports. >> >> That are That are not the easiest of buyers, certainly historically. So So maybe that we'll start there as your first question. Like when you look back and think about like what did you guys get so right? I don't know if it's on the go-to-market side or something to scale an enterprise B2B business that quickly. Any things that you would share that other, you know, enterprise-focused AI companies could learn from?

1:55 >> Well, obviously we picked great investors. I mean, clearly. But, you know, I I think I always treat the sales and distribution as equally important to the tech. And I think we were maybe patient enough to know that we had to get the product right before we really started to push. >> Yeah. >> And then, the way that we built our initial go-to-market team was very, you know, non-traditional. >> Yeah, it was very non-traditional. >> Al- Almost nobody had a sales background. I don't have a sales background. I'm just saying here.

2:27 >> The first guy who joined the team came from McKinsey. And >> Oh, interesting. >> the first sort of, you know, sales guys in the team >> Yeah. >> were very consultative. >> Mhm. >> And we really focused on, you know, how can we make the customer win? And we almost sold them on the, you know, idea of what AI could become in their business rather than, you know, here's feature XYZ. >> Right. >> And we can >> be a partner to you on that journey.

2:57 >> And we've always said, this is not a destination. And, you know, the product that you are buying now might very well not be the product that you have two years from now. But, we are going to work our ass off to keep you at the frontier and build whatever it takes to keep you there. >> Yeah. >> And so, I think we were we were selling more than a product. We were selling a partnership and we were selling, frankly, the opportunity of working with us on shaping what that was going to look like. And it's it's I think a real skill to work with enterprises who end up rooting for you.

3:32 >> Yeah. Right. Like yeah, yeah. >> Like they want you to win as much as you want to win. >> Yeah, that's right. >> And then, when we brought in the first layer of management, that was also not traditional sales managers. That was, you know, an ex-founder who had just sold his business for 50 million. Leo. Right? And I asked him, "Hey, I'm looking for my first sales manager." He said, "Oh, I know lots of great people."

3:54 >> Yeah. >> And then I said, "No, I want you." And he said, "Absolutely not." And then, you know, a few dinners later, here we are. >> You all have approached everything first principles, think different, and I think that's a great that's a great lesson for all the founders. Conventional wisdom doesn't have to rule the day. I love that story about convincing Leo because certainly in the early days getting things start like being an evangelist and and a recruiter is one of the most important jobs you have as a founder and as a leader. I remember during my SendGrid days when I was building, I always would say that every year my job was wildly different.

4:27 Like what the company needed for me was wildly different. Like one year it was product strategy, another was rebuilding the management team, the next was about getting ready for an IPO, and the next was, you know, how do you manage Wall Street analysts? I mean, just every year is wildly different. And for you, that must be like quarterly. >> Yeah, it's probably every quarter. >> Going at such a pace. Like if you were to reflect back, like what did Agora need you to do best?

4:52 >> Well, you're okay at many things, right? And then you and then you should focus on the things where you strike. I also tell the company that we're going to be a different not only job, but a company every quarter. >> Yeah, which has been true. >> Yes, and I do and I do think it like forces every function to grow both as a team and as a contributor to that team and to the company. But yeah, if I reflect a little bit on my own role, I think in the very very early days when we just started out like pre-wise, it was a lot about like drumming up the momentum, like getting an initial set of design partners, getting the initial engineers to quit, you know, like great jobs, great jobs, you know, with a mortgage, like, "Hey, are we going to join, you know, Max and the team? And they have, you know, $300,000 in in funding, and >> >> you know, if we >> huge balance sheet >> Yeah, right?

5:47 >> >> And so, you know, definitely traded in some personal favors there, I think. And then during YC was when I really honed in on on doing sales myself. And so, during the batch we went from, you know, 50,000 of ARR to almost a million in ARR. And, you know, that was partly because during YC you need to show growth. If you want to have If you want to have a good shot at demo day. And, you know, ultimately that led to our seed round.

6:16 Then, I think it changed a bit to >> >> being a customer success manager. All of the sales that we did obviously led to a lot of customers wanting to come on board. Everybody and training and material and it's kind of like this one-to-many. Remember doing one of my biggest onboardings, like 350 people, the entire firm. And this was back when I'd been, you know, in legal tech for like 9 months. And you start to get asked these really intricate legal questions about M&A and litigation, you know, IP and it I think forces you in a good way to grow really quickly.

6:54 You got to be a domain expert. You got to learn in a hurry. And then, once we really started scaling, then hiring became, you know, the number one thing for me. And so, we decided to bring in our sort of first set of, you know, head of sales, head of engineering, head of marketing, head of people. And that has just been phenomenal because it's it's there we went from 4 million to 70 million, right? And and then it's just fire fighting >> >> and and realizing when do you have leverage where, right? Like we we've had these moments where, you know, like investor interest bubbles up. Somebody tries to do the round internally and we go, "Well, let's, you know, go check what the market thinks."

7:40 Yep. then we typically get to add a new great partner So, we and now, I probably split my time between, you know, recruiting and people, product, sales, and then other. >> Amazing. >> Right? >> Amazing. Yeah, no, and it does and it changes. It sounds like it's very different chapters of the company and you just have to keep keep scaling with it. You've done a remarkable job of doing it. >> Thank you. But, I also got to re-qualify for it, right? Like, I I I have that view of myself.

8:09 >> Amen. >> I love that. Like, like, no, but you do it because I I tell that to all my team. >> you set the example for everybody in the company. >> I think everyone has to do that. Everyone has to do that. Everyone has to do that. >> Yeah, which is amazing. Which is amazing. Now, given everything you're doing and you are managing this rocket ship, how do you take care of yourself? There are people out there listening, I'm sure, that are are doing their own version of this and I know having sat in the seat, being a CEO of of anything at scale is hard and it's lonely. It takes a lot of time and effort. I know you fly 200 days a year all over the world.

8:39 >> a year. >> Yeah, a lot of different time zones. How do you take care of yourself so that you can be your best self for Lagore? >> I think it it wouldn't be appropriate to answer this question without making a shout-out to my partner, Louisa. I think we do a great job of taking care of each other. She has a very tough job, too. She works in the private equity team at BCG. Yeah. >> >> You're both running.

9:02 >> You know, like, sometimes we see each other on the in the cab home at midnight. And I think we have both both adopted a mindset of like, right now is a very special time to be building. So, you know, some things in life just has to take a pause and that's okay. Like, you can prioritize different things at different times in life. >> That's right. >> But, you need to have fun and you need to feel like, you know, as long as you have momentum, I feel like it's really easy to continue. I think also recognize, you know, if I'm traveled a lot to like work really, really hard for a long time, you start to feel it. I got actually had a period almost like a year and a half ago.

9:44 I was working basically non-stop for 3 weeks and my I started like losing the feeling in my legs a little bit. I told her and she was like, "You're packing the bags and we're like going to your like parents and we're not like leaving until we feel better." And then we did that and you know, disappeared and then we're we're in good shape again. >> I love that >> answer by the way because I couldn't agree with you more. Having a life partner, somebody to go through it with that is supportive is probably the most important >> And it and it goes both way. And and I think also internally at the company, right? Like I'm not the only person working hard.

10:18 >> >> Many people here are working insanely hard and we need to take care of each other. So I'm really happy to see you know, we just had a big Legor team do the biggest cycling race in Sweden. >> Oh, that's awesome. >> and you know, there's like the run club and all these things that are that are I think good for for >> Yeah, stay active. >> running the sprint and a marathon distance. >> Yeah, yeah. That's awesome. That's awesome. I love it. all right, well let's let's switch gears to the operating side.

10:48 I'm sure a lot of listeners are interested in understanding like how how just the operating rhythm of the business. Like weekly meetings, quarterly meetings. How do you decide who's in the room, who's not in the room? That kind of stuff and how has that changed and evolved over the last >> has changed over time. I mean look, when >> >> Back in the very very early days, >> You get in a room. >> Well, we got in a room and and you know, the idea back then was we voted on what we should build.

11:14 >> Yeah. >> So basically everybody had a vote. >> Yeah. >> And it was a very shitty idea because >> Yeah, because basically what what ended up do happening was I would go to everyone before and go, "You you better vote for this cuz this is what the customer wants and I'm the person doing all the customer stuff." >> That's right. I've got the data. >> know. >> Yeah. >> And then everybody would vote the same.

11:32 So, that was really useless. >> Yeah. And then >> Designed by committee now. >> Yeah, and then like I used to have this have this phase of like lots of one-on-ones. And then I realized that's a very inefficient way of doing work. Now, I kind of operate the leadership team with a lot more transparency. We just adopted this thing in in our Slack that we track a leaderboard for who posts a the most percentage of their communications in open channels versus DMs.

12:03 >> Oh, I love that. >> So, that's like a leaderboard we have. >> way to drive transparency. >> yes. And so, you want to be high at that leaderboard. And the leadership meeting has developed from, you know, kind of reporting or like informing to more of a decision forum, which I think is like where you want to have it. >> Yeah. >> What what you want to have it to be. I think we also asked you for some advice on how to >> I try I you know, try to share some lessons learned.

12:32 >> But but but but but but it's it's I think different things for different groups. And Now, I think we've gotten in the rhythm of we have a quarterly offsite. We where we sort of talk like, okay, you know, 3 months ahead, what do we really want to get done? And are there any like major blockers that we need to collaboratively attack to like make sure that that happens. >> Yeah. >> >> Cuz that's the hardest bit, right? As you scale is to get anything done. It's required collaboration.

13:00 >> consumption-based pricing. >> It touches everybody. >> We were telling you last board meeting, you know, these are all the things that we're going to do. And you're like, Max, like this is going to touch like legal, finance, product, engineering, sales, marketing. And it did. And we got it done, right? >> And I and I think you also recognized that sometimes you need somebody to step in and be a the sponsor or product manager for that particular project.

13:28 maybe more so than I had appreciated it before. Cuz you you're you're a small company and you think, "Oh, process is bad." You know? And then you realize that, "Hmm, like the right process is actually pretty good." >> It's hugely efficiency driving and as opposed to the opposite. So, can be if done lightweight, surgical, you know, places where and it often is when you have to drive that cross-functional alignment to do something big. >> And and and Jonathan was the previous CISO at Ramp.

13:58 Just joined us as our as our chief information officer. And I think he's also now coming from a, you know, one bigger scale. >> Yeah. >> And like, all right, these are all the things that are going to break. >> Yeah. >> These are all the AI systems that we have to put in place cuz this is what works. >> 100%. >> And then you just run. >> Which by the way, I I have to compliment you on how you've assembled this management team.

14:18 >> >> It is exceptional. You've really brought in some exceptional talent and such a great mix of people that have grown from within >> Mhm. >> and some from the outside. Some have seen >> >> scale as you're mentioning at ever larger scale so they can tell us, "Hey, these are the things coming around the corner that we fell into and you don't need to fall into." I just think what a what an exceptional team you guys have built.

14:39 All right, another one would be if others are built lots of people are building in different verticals. How do you How do you stay ahead when building a vertical AI company? Any any like insights to share with the audience on This is what I would do. This is what's led to our success and >> Don't enter legal tech. >> Don't enter it. >> >> Or or if you >> This game's over. >> Or if you do, you better join Legora.

15:00 >> That's right. >> That's right. >> No. I think that you need to be quite clear and honest to yourself about what are we building that won't automatically fall into the bucket of like Claude does this. >> Yes. >> Right. >> Yeah. >> And >> That's right. >> And if your core thing is a chat UI, like I think you have to really think deeply about what what what you do differently.

15:31 I think that there's so much, you know, blue ocean and space still left to be explored. But I think we've we've kind of found like this local maximum and now everybody is running at. And so I I actually really have a lot of admiration for these like vertical tools that are a little bit different. We look different when you start to look at it from a, you know, subvertical perspective and you look at, all right, what are the things that we can do in litigation and disputes that is like fundamentally different from ChatGPT or Claude. Exactly. But then and then it looks very different in M&A.

16:09 Like you go all of these different buckets and you look, wow, okay, this is really like a wall-to-wall solution for a legal team. >> I think the applied we're just in this moment where every enterprise is trying to figure out how to take in this new technology. >> CIO is getting asked, roll out Claude or like roll out ChatGPT and like what's our strategy for embedding as much as possible into that. Right? And then you know, that's the sort of top-down and then they ask, well, okay, well, in finance, you know, we want to use Ram.

16:41 And like in legal, we want to use Legwork. And you sort of like end up going down that path anyways. >> Because it requires specialization, I think, to make it really hard. It's really absolutely critical and and you won't get adoption unless you're doing what Legwork is doing. It's really making it bespoke and tailored to that persona in that segment of the market. >> Yeah, but but I think you need to you also need to realize as a vertical builder that like this this like wave is like building up behind you. It's like coming pretty fast.

17:11 >> >> And so like if you're going to stay like two Yeah, like if you're going to stay say two three standard deviations ahead. You better run. Like this is this is hard. Like not all of the companies are going to survive. And so I love the the velocity that you all have built at. The product innovation product velocity of Logora is absolutely more than top decile and all the constant shipping of new capabilities that is customer led and driven based on their use cases. I just think is it's huge part of the formula of success that we saw was okay, this is a product led company.

17:48 This is a product led company. All right, another one. If you could go back if you could send a message in time backwards to Max at let's say when I met you a year ago when you were at 20 million. What would you do differently? What would you send what message would you say hey from the future here's what's coming. You should really focus on this in a way that you didn't. >> I I would have told myself higher faster and expand more.

18:18 >> Mhm. >> Because that's what we're doing now. >> Like aggressively. >> Four times this year we've had to up the head count target and the growth target, right? And >> I saw on the board deck we just did it again. >> >> And our VP of talent is not thrilled. >> More busy. Most important thing we do hiring great talent. >> But it's also like you actually need to be staffed to bring on that many people.

18:48 Like we're running the first onboarding class with over a hundred people. And that is like all right, you know like 15% of the company is new for this month. >> It is incredible and you know, we'll often say you know, hire the incremental head at in a hyper growth company at 20 million is better placed in talent acquisition and recruiting. It just is because that leverage point is so important and if you don't do that, it's really hard >> It's true.

19:17 >> to bring in the talent at the pace and scale that you need. That's amazing. It's so amazing, Max. This has been such a great discussion. Thank you for making the time. I know how busy you are. >> Thanks for coming out to Stockholm. >> Man, I I love it every time I'm here and you know, but this is for me it one of my greatest joys. I just got to talk to all the managers in the company about performance managers and how do you become a great both manager and leader.

19:41 I love I both I'm humble to have the opportunity to do it, but also that you all are investing the time to develop those people. It's awesome. >> I got a lot of positive Slack messages. >> Wow, that's I love that and I I think that'll determine our future success. Getting those folks skilled up is great. Your lessons learned that you're sharing here with the audience. Thank you for doing it. on behalf of Elliott and the Bessemer Growth Team and thank you for bringing us along on this wild ride. We couldn't be more excited >> So glad to be together.

20:11 >> Yeah, thank you. >> Awesome. Thank you, Sameer. >> Thanks. Ciao.